Darragh O'Brien (Fianna Fail)

I welcome the Minister of State. There is a lot to be said on Second Stage. We will have an opportunity to go through the sections of the Bill in more detail on Committee Stage tomorrow. The Finance Bill 2012 will bring into effect many of the measures that were voted on in the budget. The ESRI has confirmed that it was probably the most unfair budget that was ever passed. When the Minister of State replies at the end of this debate, perhaps he will set out the Government's response to the ESRI report, which states clearly that the poorest 40% of households will suffer the highest fall in income as a result of the measures in the budget.

There has been a great deal of discussion about the growth forecast on which the budget was predicated. A growth rate of 1.6% was forecast late last year. I will give the Government credit by mentioning that we appreciate it is operating in a volatile international environment and a difficult economic environment. I wish to focus on the budget measures and the targets that require to be hit, for example, in relation to our current budget deficit. Is the Government still working on the basis of a projected growth rate of 1.3% for this year? The median growth rate that is being forecast by independent groups and domestic and international interests is 0.5%. That would leave us way off the mark. I would like the Minister of State to give the House some clarification in that regard during today's discussion on the Finance Bill 2012. What is the Government actually setting its measures against? Growth is important. Obviously, it will make everyone's job a lot easier if we can see growth coming into the economy. There is a difference between the 1.3% growth rate that the Government is basing its figures on and the 0.5% rate that is being forecast by independent outside agencies.

Where does the Minister of State think growth will come from? He has mentioned a couple of items. The Bill gives formal approval and legal basis to the increase in VAT. The Government has decided to increase the VAT rate by 2% from 2012, rather than taking the staggered approach that was recommended under the agreement with the troika. The VAT take was down in the last quarter of 2011 and the first quarter of 2012. Does the Minister of State envisage that our VAT situation will improve or disimprove? His colleague, the Minister, Deputy Varadkar, has failed to give a commitment that the reduced rates of PRSI for the hospitality sector will apply after December of this year. The Minister was probably right to question whether 6,000 jobs have been created in that sector. I would be interested to hear the Minister of State's view on that.

I would like to speak about a couple of the specific sections. I gave a guarded welcome to the proposal to increase the level of mortgage interest relief provided to those who purchased property for the first time between 2004 and 2008. I would like to hear an update on that in the context of the Keane report. I know the Minister of State gave this House an update on it in good faith prior to the budget. He suggested that the Government would produce a mortgage arrears implementation strategy in advance of the budget. He referred to that as a "bold statement" to make in this House. Although it was a bold statement, it has not come to fruition. What is the Government's position on the publication of such a strategy? The Minister for Finance gave a commitment in the other House that it would be published before the end of December. When the Taoiseach met the former US President, Bill Clinton, before Christmas, he said it would be published within a matter of weeks. He said on 8 October 2011 that the Government would make a decision in the next couple of weeks.

Leaving politics aside, all of us will agree that the ongoing mortgage crisis is getting worse as people find themselves in growing arrears. Some people say that a minimum of 8% and up to 10% of residential mortgages on principal private residences are in some level of distress. The personal insolvency Bill will go some way towards alleviating those difficulties. It will not go the full way. The Minister of State has mentioned previously that the banks have been given money to write down debt. It is a matter for them to decide how best to deal with it. The measure the Government has introduced to increase mortgage interest relief will apply to everyone, regardless of income or mortgage situation. Everyone will benefit from that. The Keane report suggested that it would be better to increase the mortgage interest supplement payments that are made to people who are in difficulty. When does the Government propose to publish the mortgage arrears implementation strategy? Can the Minister of State give me a date for that? This cannot continue further. Members on all sides of the House have been raising this issue on a weekly basis in a non-partisan way. I notice that Senator Gilroy is laughing. I might have been a bit partisan. All of share a genuine concern in this regard. We really need to move on and do something in this regard. That is covered in sections 8 and 9 of the Bill.

I would like to ask a couple of questions about section 64 of the Bill, which relates to other property reliefs. An overlooked aspect of the budget was the introduction by the Government of many new property reliefs. In previous times, that would have been seen as a way of trying to fuel the property market. I put it to the Minister of State that some of the exemptions that have been proposed in section 64 are designed to benefit speculators. For example, those who retain a property for seven years or more will be exempt from capital gains tax. Most of those properties would be investment properties. Similarly, the reduction in stamp duty on commercial property will assist speculators. The Minister, Deputy Noonan, made broad-ranging changes to future property reliefs in the budget. We all hope and pray that things will improve in the property market. I wonder whether seven years after this Bill has been passed, we will compare these reliefs to those that were given for the valid reason of facilitating further hotel expansion. They were badly needed at a certain time but should have been stopped within a given period.