Beverley Flynn (Mayo, Fianna Fail)

I welcome the opportunity to speak on the Finance Bill. I recognise that because of the current economic climate in which we find ourselves it has been necessary to broaden the tax base of the economy. I welcome the fact that we have retained the corporation tax rate at 12.5% and that the exemptions for the income levies have been extended to those with a medical card and that higher thresholds have been introduced for those over 65 years of age.

I would like to spend my time dealing with the final point made by the Minister when he said he would give consideration to any constructive suggestions made during the debate. The first issue I wish to consider relates to sections 3 and 4 of the Bill and deals with mortgage interest relief. We all know that relief will be restricted to the first seven years for persons with qualifying loans. From my experience in my constituency and having received texts from many people today, I am aware that many families are experiencing significant pressure with their mortgage repayments as a result of the pension levy and the change to the income levy. I received an e-mail today from a person in my constituency who has seen a reduction in his weekly income of 40.7% when all of the changes in allowances and mortgage interest relief are taken into consideration.

Many are annoyed by the recapitalisation of the banks, at €7.5 billion plus, that will materialise in the coming weeks. They are annoyed because they do not see any benefit for ordinary citizens. They are paying for it through their pockets, but they are not receiving any real benefit. I am not just talking about small businesses, although these are essential, but about ordinary individual citizens of the State, people with one house - their primary residence - and mortgage. Through no fault of their own, many of them have lost their jobs. We are in a dreadful situation where so many have become unemployed in recent months and the people concerned find themselves in a very difficult situation with regard to the banks. Deputy Ardagh referred to this issue and I support his call for real movement on the part of the banks to ease the pressure on those with mortgages who find themselves in this situation and relieve their fears. The Government has asked for a period of five years to get the public finances in order. Therefore, it is only fair that we should say to the banks that those who find themselves in a difficult situation because of the economic downturn should be given a period of years to get themselves back on track. This means giving them the opportunity to pay only interest on their mortgages for a number of years. Whether they are on a fixed or variable rate, those in crisis must be looked at with sensitivity and flexibility, particularly by the banks which are being funded by the taxpayer. I ask that the rate of interest to be applied be reduced to the cost of overnight money in the banks which is in the region of 1.75%. If this suggestion was implemented and breathing space was given to mortgage holders, it would make a huge difference. It would keep people in their homes and ease their fears. It would also mean greater acceptance by ordinary citizens of the importance of protecting the banks in order that the economy can be protected and would create an awareness that this also affects Joe Bloggs in his or her pay packet. I urge the Minister to give consideration to this measure on Committee Stage.

I have spoken on many occasions in the House about a sector that does not find favour with many - the construction industry. I agree with some of the comments made by Commissioner Charlie McCreevy when he addressed the Leinster Society of Chartered Accountants last week. While we are in this mess because of problems caused by the banking sector and property developers and builders, the people concerned will play a significant part in the recovery of the economy. They may not be the same people, but we will require developers and builders to play an important part. This may not be to the same extent as in the past, but they will have an important role to play.

There are negatives in the Bill for the construction sector, in particular the abolition of mortgage interest relief which is to be phased out over seven years. The reduction in interest relief on residential property loans, from 100% to 75%, is also a negative. Many may have invested in a second home in order to put their children through college. Rents have reduced and barely meet repayments. Now, following the reduction in interest relief from 100% to 75% and despite the fact that interest rates have reduced, they are in a situation where it may not be possible for them to retain these properties. This will result in a flood of additional properties onto the market, which is a further negative for the construction sector.

The one positive in the Bill is to be found in section 20 which deals with the exchange of houses scheme. However, to be honest, this a complete and utter waste of time - in my constituency at least. I hope the Minister will pardon me for saying this, but this measure does not offer any value. It has been included as a positive, but it will make no impact in my constituency.

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