Michelle Mulherin (Mayo, Fine Gael) | Oireachtas source

I welcome this tax relief initiative because it recognises the great potential for growth in this area of aviation beyond the traditional emphasis which has been on increasing passenger numbers and so forth. By offering an incentive in the form of tax relief, the Minister is obviously hoping that there will be investment in hangar facilities and such. In its tenor, I welcome this incentive because it is forward looking and has the potential to create jobs and investment in the regions.

Like Deputy Naughten, however, I believe there is an issue here in terms of how effective this can be in achieving its objective of encouraging growth in this business. The current provision, in my view, confers a far greater advantage on any airport with existing facilities and which might be in receipt of rental income. Such an airport, one could argue, could be in a position to borrow to invest in hangars and other facilities and, in turn, offset capital allowances in full against rental income over seven years. On the other hand, if one takes an airport such as Ireland West Airport Knock, it would not be in a position to benefit. Furthermore, the proposition is not so attractive to private investors to any significant degree. The likes of Knock airport has no rental income and, because of its existing debt burden, is unable to borrow to fund hangar building. Therefore, it cannot avail of the capital allowances going forward. The way the particular section of the Bill is drafted and structured means there is no great incentive for private investors to go in either. There is very little incentive for private investors that an airport like Knock would need to have in order to grow, compete and attract inward investment for this type of business, allowing it to become self-financing in the future.

My proposal is that the Minister might consider an amendment on Report Stage or during the debate in the Seanad to alter the wording of the Bill to allow that the tax relief or the capital allowances would be made available against other income. I suggest that unused capital allowances would not be restricted to the tax life of the buildings and should be carried forward until they are used up. Also, I suggest that capital allowances should not be deemed as a specified relief used by high income individuals. Finally, I ask the Minister to consider the possibility of introducing double rent relief and a section 23-type scheme whereby the cost of the construction or refurbishment of the qualifying property is given as relief against the rental income of the building. Knock Airport does not have the wherewithal to build hangars and engage in such capital investment in order to be able to avail of this tax break. It is not so attractive for private investors either, who we would like to come in.

Amendments such as these would make it more attractive and I ask the Minister to consider such amendments on Report Stage or in the course of the Seanad debate. These amendments are key if this section is to have any benefit for the likes of Knock airport, which I am sure is the Minister's intention, given that he said that the incentive will be universally applicable. However, if in reality certain regional airports cannot avail of the incentive and investors are not interested, then we have a problem and the tax break is not going to mean anything to airports that do not have assets, hangars or rental income to write off. I ask the Minister to give this further consideration.